Nov 27

Close Invoice Finance – Why Manufacturers Should Consider Financial Support

In order to ensure it remains a viable industry amid escalating financial challenges, it is clear that the UKs manufacturing sector needs a vital injection of funding. The Eurozone crisis, which continues to simmer, combined with the squeezing of domestic demand, should force business owner managers in the manufacturing industry to consider various funding solutions, as they look to grow their business in 2013 and beyond.

Problems affecting SMEs
As indicated above, the combination of the Eurozone crisis, rising input costs, and diminishing demand in the UK market has put a sizeable amount of strain on UK manufacturers. Despite the results of a recent Industry Trends Survey by CBI points to the fact that some manufacturing companies are cautiously optimistic about their growth in 2013, there are still considerable obstacles which are particularly prevalent at a grass-roots level. These obstacles include escalating fuel prices, inflation, and easy access to the funding which supports growth.

The right kind of financial aid
In recent years, manufacturing businesses looking to tap into the fertile markets outside the Eurozone have been able to do so with the aid of invoice finance and asset finance. These funding solutions have enabled them to strategically invest in the export market; and subsequently benefit to a considerable extent.

Companies such as Close Brothers Invoice Finance (formerly Close Invoice Finance), and partner companies with the Close Brothers group, have been helping businesses in the UK manufacturing industry by supplying invoice and asset finance solutions. These are bespoke solutions, tailored to the individual needs of the client, which have proved to be very effective.

What is invoice finance and asset finance?
Invoice finance allows businesses to unlock funds against the value of their sales ledger which is usually up to 95% of the value of an invoice raised. Asset finance includes hire purchase, leasing and refinance. The latter is a popular solution as it unlocks the value of assets which a company already owns, in order to help fund other business objectives or to purchase new assets.

Invest, invest, invest!
Because the economy is changing at a rapid pace, the companies which survive and grow will be the ones which diversify and invest. At present, the UK government is asking manufacturing companies to increase their yield; however, because the current market still lacks liquidity, companies are finding it extremely tough to engage in business activity outside the Eurozone.

Organisations such as Close Brothers Invoice Finance (formerly Close Invoice Finance) are actively illustrating why these types of lending solutions are key to the funding arrangements of SMEs. It is important that business owners realise that asset finance and invoice finance are not just limited to managing cash flow they can also be used smartly to invest in equipment and personnel, which are vital for business development and growth. By unlocking cash flow in individual businesses, the UK economy will ultimately benefit.


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